NSW cap on selling water to the environment leaves everyone a loser
Date: 24-Sep-2009
The NSW Government’s new Victorian-style cap on buying water entitlements for the environment is bad news for the whole Murray-Darling Basin, the Australian Conservation Foundation said today.
A memorandum of understanding between the NSW and Commonwealth governments will replace the embargo on selling water to the environment with a volumetric cap intended to mirror the Victorian 4 per cent cap on inter-district trade.
“The NSW and the Commonwealth governments should have pressured Victoria to remove its nonsensical 4 per cent cap instead of matching it with another short-sighted barrier to fixing the problems of the Murray-Darling Basin,” said ACF’s Healthy Rivers Campaigner Dr Arlene Buchan.
“Caps on trade and embargos on selling water are an impediment to solving the overextraction problem, restoring our rivers and wetlands to health and putting the Basin’s irrigation industries on a sustainable footing.
“Caps and embargoes are bad for the environment, as they slow down the rate at which life restoring flows can be returned to parched wetlands, and they are bad for irrigators who should be allowed to trade an important asset.
“The faster the gap is closed between the current extraction rates and new, lower extraction rates the easier the adjustment process will be.”
A report by Frontier Economics for the ACCC found Victoria’s 4 per cent and 10 per cent caps and the NSW embargo on trade of entitlements to the environment had reduced economic efficiency and unfairly disadvantaged some entitlement holders.
“Taking an eye-for-an-eye approach means everyone ends up blind. All Murray-Darling Basin governments need to refocus on the real issue: addressing overextraction of water in a timeframe that will secure a future for our wildlife and wetlands and put our irrigation industries on a sustainable footing.”